Death to ownership: A future where everything is available and nothing is yours
Sometime back, I was cleaning out the room in the home I grew up in and found a huge cache of old cassette tapes. There were hundreds of tapes with incalculable nostalgic value. Yet, materially they were nothing more than junk. At first digital MP3s held in CDs, hard disks and iPods replaced them. Then, the era of streaming content from the cloud was upon us, and they rendered terabytes of personally owned media as useless as the cassette tapes.
We no longer own content. Your Netflix subscription gives you the right to access a vast library of content on-demand. But it’s not really yours. It doesn’t surprise us when iTunes chooses to remove an album (and even reconfigures our personal library). Mostly, we don’t mind this because a near infinite selection of content is now within our reach.
Perhaps this is just the beginning. Having sucked away all our content onto the cloud, could technology be coming for other ‘stuff’ too?
The new sharing economy promised to change the way we bought and used things. On paper, the idea even made sense. Didn’t we all have too many things idling time in our homes? Why not rent them out to others who’d pay to use it?
The rise of unicorns like AirBnB filled us with a giddy vision of a changed world where Millennial-minded earthlings would rent and share things, the ever inflating production would come down and fewer resources would get exploited.
It lasted very briefly, though.
Turned out, AirBnB was a one-off success that worked if you had some space to share. Renting and sharing things was a whole another ballgame. The companies that rode the ‘sharing economy’ wave since then, hoping that people would rent out power drills and bikes, have nearly all shut down.
The on-demand ride-hailing industry has since shouldered the burden of disruption that the sharing economy promised. Uber, Didi Chuxing, Grab and Ola are slowly killing private vehicle usage. Quite possibly, the on-demand, pay-as-you-go model will be the dominant form of transportation for many, over the next decade.
Yet, even this model struggles to scale today, with wafer-thin margins they are forced to manage an army of drivers and push them towards in-human levels of efficiency. The promised age of on-demand mobility, zero ownership, is struggling against the real world friction around the difficulty of access and uncertain availability.
Maybe we were trying to launch rocket ships with kerosene all along, for technology that may fundamentally change ownership may be just around the corner.
Automation of movement could be the technology that unlocks the true promise of pervasive on-demand mobility. Lyft contends that private vehicle ownership will be a rarity by 2025. Even discounting that as self-serving optimism, industry experts believe that a decade later, self-driving will be common, making cars a predominantly shared resource, much like the roads they travel on.
And poof! Just like that, an expensive asset that people owned (and used for about 5% of its lifetime) will no longer be a necessity. This will impact a whole host of industries including maintenance, dealerships, insurance, fuel stations, advertising, urban infrastructure and car loan providers. This is the business Uber wants to be in eventually, owning all of our movement needs and killing off the last bits of human inefficiency.
We’ll summon mobility at the tap of our phones, by barking orders into the air or perhaps by doing nothing as smart assistants proactively have a ride waiting for us when we step out. Essentially, centrally owned fleets will kill car ownership.
But the big impact of automation of movement extends beyond just personal mobility.
Goods will move in self-driving equipment across the supply chain before people do. Self-moving robotic shelves, pickers and even forklifts are increasingly making the warehousing tasks cost-effective, error-free and quick.
How would our access to goods change in this near fully automated supply chain? Robots in warehouses will respond to our request for access to a product in real time, picking, packing and shipping items that, in turn, move on automated delivery systems right to our doorstep. Even further along, self-moving mini-warehouses (or static local centres) will proactively stock the most frequently ordered items in a given area for quick disbursement while self-driving trucks and other parts of the delivery chain would be replenishing items and using the new data to make more fine-tuned predictions.
And not just on the ground.
Drones could deliver small items right into little delivery pads set into our homes. Amazon and Walmart are patenting floating warehouses in the sky from which drones would launch down with goods. Talk about having your ‘stuff’ in the clouds.
In such an environment, ownership will be more about buying the ‘rights’ for access when needed, rather than a physical ownership of the object itself. With the ability to get access near instantaneously, paying for eternal ownership (and the space for holding the item) will seem archaic and cumbersome.
Who owns what, when?
We spend a lot of time and effort tracking, changing and enforcing ownership rights using a maze of rules and systems. Given that private ownership is the bedrock of the modern capitalistic society, it makes sense that we spend all this time and effort to keep it kosher.
But this makes ownership and its changes a slow and cumbersome process. Our current systems cannot support on-demand changes in ownership. While self-contained platforms (like Uber, for instance) can help simulate it, they will always be limited in scope and expensive (middleman seeks a chunk of the value).
Blockchain offers a way out.
Smart contracts could solve the problem of tracking and enforcing ownership near instantaneously and without the need for cumbersome middlemen. These pieces of code on the blockchain can not only track and enable ownership changes but also enforce it.
Imagine an AirBnB-like platform set up on the Blockchain and access controlled through smart contracts. A potential renter can gain access to the property once payment is made. Smart contracts can control connected locks and other services in the apartment. When the period is up, or payment stops, the locks stop working automatically.
The ease of controlling ownership rights using blockchain could open up sharing/time-based ownership of complex assets like real-estate and homes. We already have startups that offer tokenization as a way of putting rights of real-world assets on the blockchain for ownership. This can easily open up fractional ownership of properties where it was previously not possible. Sweden is one of the first countries to move towards holding its land registries on the blockchain.
Beyond tracking and enforcing ownership, blockchain can also smoothen the process of filtering the quality of participants in a transaction (you know, like the driver rating in Uber). Having your online reputation on a blockchain (like a tenant rating) will significantly increase their value for everyone. Having a consolidated set of reputations around a range of variables can significantly speed up transactions and enable us to remove any kind of intermediation.
All of this means that in the future, sharing ownership or even changing ownership on the fly would become a seamless and frictionless process. In the next decade, the World economic forum expects about a tenth of the world’s GDP on the blockchain. It could help put the on-demand, fractional-ownership economy on steroids and make ‘rentership’ a more efficient, standard way of using resources.
A world where most things are a service will begin to look fundamentally different. Our homes will be plug and play locations for services like food, entertainment, comfort etc. We’ll buy “rights” to use a lot of objects and services for the period we actually need them. Our cities will be teeming with infrastructure we use as desired, paying on the go.
This is good news both from the perspective of more people being able to afford using more things as well as reducing the amount of resources going into creating products that are used for a small fraction of their lifetime.
But, at the end of the day, ownership would still need to exist. Someone must own the cars that drive themselves in order to have them maintained and in good condition and have them fixed when they malfunction. When things go wrong, someone would own the liability.
It’s likely that a central entity, most likely a large tech company, will control a significant part of the value of this new system. Would it mean that the death of ownership will also herald the death of free agency in its purest form?
We could end up in a technological dictatorship where how and when we access services is controlled by a handful of monopolies. It’s happening already. Today, when we buy a smartphone, we don’t inherently own the software that comes with the phone. A Tesla could choose to roll back some features using over-the-air updates because they are not safe. All we really own then is the hardware, and even there, there are severe restrictions on what we can do with it.
Tomorrow, this could happen with stuff around us. Toyota Financial Services has been experimenting the usage of blockchain to lock people out of their cars if they fall behind on car payments. All this is strangely reminiscent of the dystopian world Philip.K.Dick wrote in Ubik where coin-operated doors refuse to let people out unless they are paid.